The local Institute for Local Self-Reliance's David Morris is quite skeptical of carbon offsets. I think he identifies many of the problems with offsets (both philosophical and practical) but I disagree with his assessment of cap and trade programs.
This summarizes my key objection to offsets:
Those who purchase offsets believe they are doing something significant when they are not. Their sense of mission accomplished undermines their enthusiasm for real actions that require more sacrifice, which indeed, may be the key selling point for those selling voluntary offsets.